Stock market today: Dow rises, S&P 500 and Nasdaq slip as AI jitters return ahead of Micron earnings

Markets are showing cracks in AI sentiment ahead of Micron Technology's upcoming earnings report, with the S&P 500 and Nasdaq slipping while the Dow ekes out a gain. The divergence reflects investor unease about whether the AI infrastructure spending cycle — which has been the dominant market narrative — is beginning to moderate or face demand questions from hyperscalers.

Micron's enrichment data tells a strong fundamental story: FY2025 revenue hit $37.4B, up nearly 49% year-over-year, with gross margins expanding to 39.8% and diluted EPS of $7.59. This is the company's fastest growth cycle in years, driven almost entirely by High Bandwidth Memory (HBM) demand tied to AI accelerators from NVIDIA and others. The numbers have set a very high expectations bar heading into the print.

The tension here is classic high-growth, high-expectations: Micron has already delivered blockbuster numbers, so the stock's reaction will hinge on forward guidance — specifically whether HBM order visibility remains strong and whether DRAM/NAND pricing holds into the next cycle. Any hint of softening demand from hyperscalers or inventory building could punish the stock sharply, even against a strong backward-looking beat.

The bull case rests on continued AI capex momentum: if Micron guides for sustained HBM demand and margin expansion through FY2026, the current valuation looks defensible. The bear case is that the 49% YoY revenue comp becomes increasingly difficult to clear, and any macro or geopolitical disruption to the memory cycle — including China export restrictions — could trigger a meaningful de-rating. Watch the HBM allocation commentary and next-quarter revenue guide as the key signal.